UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

NATIONAL ELECTRICAL 

BENEFIT FUND,

Plaintiff,

Civil Action 2:10-mc-18

v. Judge James L. Graham 

Magistrate Judge E.A. Preston Deavers

ACJ ELECTRIC, INC.,

Defendant.

REPORT AND RECOMMENDATION

 This matter is before the Court, by Order of Referral pursuant to 28 U.S.C. § 636(b), for

consideration of Plaintiff’s Motion for Contempt (ECF No. 5). Plaintiff moves this Court for an

order of contempt against Defendant ACJ Electric, Inc., and its officers, President Glenn H.

Kesselring and Vice President William J. Smith, as a result of their failure to comply with the

May 25, 2010 Order issued by the United States District Court for the District of Maryland and

registered in this Court on July 6, 2010. This Order requires Defendant to produce its books and

records to Plaintiff’s auditor and pay any amount of unpaid contributions determined to be due

by the auditor. For the reasons that follow, it is RECOMMENDED that the Court enter

judgment in favor of Plaintiff in the amount of $60,266.61 plus reasonable attorneys’ fees and

that Plaintiff’s Motion for Contempt be GRANTED. 

I.

Plaintiff brought this action under the Employee Retirement Income Security Act of

1974, as amended, to recover delinquent pension fund contributions from Defendant, who is an

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employer obligated to make pension fund contributions on behalf of its participating employees. 

Plaintiff alleged that under the terms of the operative Collective Bargaining Agreement,

Defendant’s failure to timely make pension fund contributions entitled it to audit Defendant’s

books and records to determine the amount of pension contributions due and to demand payment

of any unpaid contributions determined by the auditor. 

On May 25, 2010, Plaintiff obtained a judgment in the amount of $7,972.71 against

Defendant in the United States District Court for the District of Maryland. (See Judgment, ECF

No. 3-1.) This amount consisted of delinquent contributions for the period December 2008

through January 2009 and March 2009 through October 2009, interest thereon, liquidated

damages, and attorneys’ fees and costs. (Id. at 4.) In addition to awarding damages, the District

of Maryland Court also ordered Defendant to produce its books and records to Plaintiff’s auditor

for the periods January 2007 to the present to enable Plaintiff to determine the amount of unpaid

contributions due for that period. The District of Maryland Court further ordered Defendant to

tender to Plaintiff any unpaid contributions determined by Plaintiff’s auditor to be due, plus

interest thereon, liquidated damages, the cost of the audit, and reasonable attorneys’ fees and

costs incurred by Plaintiff in connection with the enforcement of this judgment. (Id.) 

 On July 6, 2010, Plaintiff registered the judgment in this Court by filing the Clerk’s

Certification of Judgment. (ECF No. 3.) On November 18, 2010, Plaintiff’s counsel sent a letter

to Defendant, demanding that Defendant make arrangements to coordinate the audit in

compliance with the District of Maryland Court’s Order. When Defendant failed to respond,

Plaintiff initiated these contempt proceedings, filing the subject Motion for Contempt. (ECF No.

5.) Plaintiff asks the Court to hold Defendant in contempt until such time it complies with the

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District of Maryland Court’s Order. In addition to holding Defendant in contempt, Plaintiff also

requests that the Court hold Defendant’s President, Glenn H. Kesselring, and its Vice President,

William J. Smith, in contempt on the basis that as corporate officers, they are the individuals

responsible for the corporation’s actions and are subject to the Court’s orders just as the

corporation itself is. In support of its position, Plaintiff relies upon Electrical Workers Pension

Trust Fund of Local Union #58 v. Gary’s Electrical Serv. Co., 340 F.3d 373 (6th Cir. 2003). 

On March 22, 2011, the Court held a hearing to allow Defendant to show cause why it

should not be held in contempt. Glenn Kesselring, Defendant’s President, appeared for the

hearing.1

 At the hearing, Mr. Kesselring represented to the Court that he stood willing and able

to produce Defendant’s books and to make the corporation available for an audit. He indicated

that he did not recall Plaintiff’s counsel attempting to contact him. Mr. Kesselring asserted that

he believed that a representative of Plaintiff would contact him to arrange the audit. Following

the hearing, the Court held Plaintiff’s Motion for Contempt in abeyance pending completion of

the audit and payment of any past due contributions. The Court instructed that “to the extent

Defendant exhibited any contemptuous conduct, it may purge itself of such contempt by

producing its records and submitting payment for past-due contributions.” (March 24, 2011

Order, ECF No. 14.) 

Thereafter, Defendant complied with the audit request. The audit report demonstrated

deficiencies and indicated that Defendant owed Plaintiff additional funds. On July 27, 2011,

Plaintiff sent Defendant a letter with the audit report, demanding that Plaintiff make payment of

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The Court advised Mr. Kesselring that, because he is not an attorney, he may not

represent the corporation.

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the amount owed, $60,266.61, within thirty days. The Court then ordered Defendant to appear

for a hearing to show cause why it should not be held in contempt unless he made payment on or

objected to the amount set forth in the audit report. The day before the hearing, Defendant asked

the Court to stay the hearing for forty-five days so that it could obtain counsel and funding. The

Court granted in part and denied in part Defendant’s motion, granting Defendant a one-week

extension. 

The Court held a show cause hearing on September 20, 2011. Plaintiff presented

evidence demonstrating that Defendant presently owes Plaintiff $39,104.90 in principal,

$11,208.23 in interest, $7,820.98 in liquidated damages, and $2,132.50 in audit costs. Defendant

did not appear at the hearing or otherwise attempt to show cause why it should not be held in

contempt for its failure to comply with this Court’s Order or the District of Maryland Court’s

Order. This Court is satisfied that Defendant had notice of the hearing, as the notice setting the

hearing was delivered by ordinary and certified mail. 

II.

A Court may, in its discretion, hold litigants in contempt when it seeks to enforce its

order or supervise its judgment. NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 588 (6th Cir.

1987). The Supreme Court has explained that contempt power “is a necessary and integral part

of the independence of the judiciary, and is absolutely essential to the performance of the duties

imposed on them by law. Without it they are mere boards of arbitration, whose judgments and

decrees would be only advisory.” Gompers v. Buck’s Stove & Range Co., 221 U.S. 418, 450

(1911). The purpose of the sanction of civil contempt is to encourage compliance with Court

orders and/or to compensate the complainant. United States v. Bayshore Assocs., Inc., 934 F.2d

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1391, 1400 (6th Cir. 1991); Electrical Workers Pension Trust Fund, 340 F.3d at 385 (citations

omitted); United States v. United Mine Workers of Am., 330 U.S. 258, 303–04 (1947).

In a contempt proceeding, the movant must produce clear and convincing evidence

showing that the respondent “‘violated a definite and specific order of the court requiring him to

perform or refrain from performing a particular act or acts with knowledge of the court’s order.’” 

Liberte Capital Group, LLC v. Capwill, 462 F.3d 543, 550 (6th Cir. 2006) (quoting Glover v.

Johnson, 934 F.2d 703, 707 (6th Cir. 1991)). “Once the movant establishes his prima facie case,

the burden shifts to the contemnor who may defend by coming forward with evidence showing

that he is presently unable to comply with the court’s order.” Electrical Workers Pension Trust

Fund, 340 F.3d at 379 (citing United States v. Rylander, 460 U.S. 752, 757 (1983)). To meet

this burden, the respondent “must show categorically and in detail why he or she is unable to

comply with the court’s order.” Rolex Watch U.S.A., Inc. v. Crowley, 74 F.3d 716, 720 (6th Cir.

1996) (internal quotation marks and citation omitted). The Court also considers whether the

respondent “took all reasonable steps within [his or her] power to comply with the court’s

order.” Peppers v. Barry, 873 F.2d 967, 968 (6th Cir. 1989) (citations omitted). 

III. 

As a preliminary matter, the undersigned finds that Plaintiff has established that it is

entitled to recover the following amounts from Defendant: $39,104.90 in principal; $11,208.23

in interest; $7,820.98 in liquidated damages; and $2,132.50 in audit costs. Accordingly, the

undersigned RECOMMENDS that the Court enter judgment in favor of Plaintiff for the

foregoing amounts as well as award reasonable attorneys’ fees incurred by Plaintiff in

connection with these proceedings and in connection with the enforcement of the judgment

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awarded. 

Turning to the contempt proceedings, the undersigned concludes that Plaintiff has

demonstrated by clear and convincing evidence that Defendant has violated this Court’s Order

and the District of Maryland Court’s Order. Initially, Defendant refused produce its books and

records to Plaintiff’s auditor or pay any unpaid contributions in violation of the District of

Maryland Court’s Order. This Court instructed Defendant that it could purge itself of

contemptuous conduct “by producing its records and submitting payment for past-due

contributions.” (March 24, 2011 Order, ECF No. 14.) Although Defendant did eventually make

its records available, to date, it has refused to tender to Plaintiff the unpaid contributions

determined by the auditor. Thus, this Court concludes that Plaintiff has met its burden of

establishing civil contempt by Defendant. 

Defendant, who was provided notice of Plaintiff’s Motion for Contempt, has never

entered an appearance or filed a response to Plaintiff’s Motion. In addition, Defendant did not

appear at the Court’s September 20, 2011 show cause hearing. Because Defendant has failed to

take any steps to comply with the orders and because it has wholly failed to respond this Court’s

order to show cause, the undersigned finds that it has failed to meet its burden to show that “it

was unable to comply with” or that it “took all reasonable steps . . . to comply with” this Court’s

Order and the District of Maryland Court’s Order. See Rolex, 74 F.3d at 720; Peppers, 873 F.2d

at 968. Thus, Plaintiff’s showing of contempt remains uncontroverted. Accordingly, the

undersigned RECOMMENDS that this Court find Defendant in civil contempt. 

The undersigned further RECOMMENDS that the Court find Defendant’s officers in

civil contempt. In Electrical Workers Pension Trust Fund, a case nearly identical to the sub

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judice, the United States Court of Appeals for the Sixth Circuit concluded that the district court

abused its discretion in refusing to hold the defendant-corporation’s officer in contempt where

the movant had presented evidence that no past-due fringe benefit contributions payments had

been made although payments were due. 340 F.3d at 382. The Sixth Circuit explained that the

officer of the corporation is the one responsible for the corporation’s affairs and was subject to

the court’s order just as the corporation itself, even though the officer was not a defendant in the

action and was not individually ordered to act in the original order. Id. The Court concluded

that the movant “only needed to show that [the corporation] did not comply with the district

court’s judgment in order to meet [its] burden” and that the movant met its burden when it

presented evidence of the court’s judgment and proof that the officer knew of the court’s order

yet failed to observe it. Id. In this case, it is undisputed that Defendant has not complied with

this Court’s Order and the District of Maryland Court’s Order. Further, given Mr. Kesselring’s

presence at the Court’s first show cause hearing, it is clear that Defendant’s officers are aware of

the orders. Thus, it is RECOMMENDED that the Court find Defendant’s officers in civil

contempt. 

Finally, the undersigned RECOMMENDS that the Court award monetary sanctions for

Defendant and its officers’ civil contempt. The undersigned determines that an appropriate fine

would be the amount owed, $60,266.61. To be clear, the undersigned is not piercing the

corporate veil and recommending that Defendant’s officers be held personally responsible for the

amount Defendant was ordered to pay. Instead, the undersigned finds that $60,266.61 is an

appropriate sanction for the officers’ deliberate failure to comply with this Court’s Order and the

District of Maryland Court’s Order in the absence of any showing that they were unable to

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comply with the orders. See Electrical Workers Pension Trust Fund, 340 F.3d at 386 (indicating

that a district court could, without piercing the corporate veil, determine that the proper sanction

for a corporate officer’s contempt is a fine in the amount of the funds owed, payable to the

complainant). The Court notes, as it did in its March 24, 2011 Order, that Defendant and its

officers can purge themselves of contempt by submitting payment to Plaintiff in the amount of

$60,266.61 and reimbursing Plaintiff for the reasonable attorneys’ fees it incurred in connection

with these proceedings and in connection with the enforcement of the judgment awarded by the

District of Maryland. 

 IV.

In sum, the undersigned RECOMMENDS that the Court enter judgment in Plaintiff’s

favor in the amount of $60,266.61, which amount consists of $39,104.90 in principal;

 $11,208.23 in interest; $7,820.98 in liquidated damages; and $2,132.50 in audit costs, plus an

award of reasonable attorneys’ fees incurred by Plaintiff in connection with these proceedings

and in connection with the enforcement of the judgment awarded. 

The undersigned further RECOMMENDS that the Court GRANT Plaintiff’s Motion for

Contempt and hold Defendant and its officers in civil contempt, fining them $60,266.61, payable

to Plaintiff, as a sanction for their contempt. (ECF No. 5.) 

V.

If Defendant or its officers seek review by the District Judge of this Report and

Recommendation, they may, within fourteen (14) days, file objections to the Report and

Recommendation, specifically designating the Report and Recommendation, and the part in

question, as well as the basis for objection. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). 

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Defendant and its officers are specifically advised that the failure to object to the Report

and Recommendation will result in a waiver of the right to de novo review by the District Judge

and waiver of the right to appeal the judgment of the District Court. See, e.g., Pfahler v. Nat’l

Latex Prod. Co., 517 F.3d 816, 829 (6th Cir. 2007) (holding that “failure to object to the

magistrate judge’s recommendations constituted a waiver of [the defendant’s] ability to appeal

the district court’s ruling”); United States v. Sullivan, 431 F.3d 976, 984 (6th Cir. 2005) (holding

that defendant waived appeal of district court’s denial of pretrial motion by failing to timely

object to magistrate judge’s report and recommendation). Even when timely objections are filed,

appellate review of issues not raised in those objections is waived. Robert v. Tesson, 507 F.3d

981, 994 (6th Cir. 2007) (“[A] general objection to a magistrate judge’s report, which fails to

specify the issues of contention, does not suffice to preserve an issue for appeal . . . .”) (citation

omitted)).

 IT IS SO ORDERED.

Date: September 28, 2011 /s/ Elizabeth A. Preston Deavers 

 Elizabeth A. Preston Deavers

 United States Magistrate Judge

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